Obama Vows to Shame Colleges Into Keeping Costs Down

Christopher Gregory/The New York Times

By MICHAEL D. SHEAR

Published: August 22, 2013

Speaking at the University at Buffalo, where tuition and fees now total about $8,000 per year for New York residents, Mr. Obama said the middle class and those struggling to rise out of persistent financial struggles were being unfairly priced out of the higher education market.

“Colleges are not going to just be able to keep on increasing tuition year after year and passing it on to students,” Mr. Obama told an enthusiastic audience of about 7,200 students and others in the university’s auditorium. “We can’t price the middle class and everybody working to get into the middle class out of college.”

The president said rising prices at colleges were partly driven by the distribution of $150 billion in federal assistance to students. He said that colleges that allowed tuition to soar should be penalized by getting less aid for their students, while colleges that held down costs should get more of the money.

He announced plans to create a federal rating system that would allow parents and students to easily compare colleges. And he said he would urge Congress to pass legislation to link the student aid to the rating system.

“It is time to stop subsidizing schools that are not producing good results,” Mr. Obama said to a roar of applause from the students in the audience.

The president offered his college affordability proposals at the beginning of a two-day bus tour through upstate New York and Pennsylvania. It is part of a campaign to highlight proposals that his administration says will help the middle class economically.

Speaking to reporters on Air Force One, Arne Duncan, the education secretary, said the president’s plan aimed to change incentives for colleges that were not doing enough to try to hold down the cost of a four-year education.

“We want to see good actors be rewarded. We want to see them get more resources,” Mr. Duncan said. “And when we’re not seeing that kind of commitment, we want to challenge that status quo.”

That challenge is certain to anger some college officials, who argue that their costs are affected by state funding decisions, the rising cost of health care, and other factors outside their control. Mr. Duncan said the administration planned to move slowly as it created the ratings system, in part to listen to the concerns of university administrators.

Mr. Obama predicted that the reaction to some of his proposals would be negative, saying that “these reforms won’t be popular with everybody, especially those who are making out fine in the current system.”

He acknowledged that the decision to link aid to his rating system would require Congressional approval.

“So, we’re going to have to work on that,” he said to chuckles from the audience.

Representative John Kline, Republican of Minnesota and the chairman of the House Committee on Education and the Workforce, said in a statement that he was skeptical of Mr. Obama’s proposed rating system.

“I remain concerned that imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage — and even lead to federal price controls,” Mr. Kline said. “As always, the devil is in the details.”

Senator Marco Rubio, Republican of Florida, said: “I’m strongly opposed to his plan to impose new federal standards on higher education institutions. This is a slippery slope, and one that ends with the private sector inevitably giving up more of its freedom to innovate and take risks. The U.S. did not create the best higher education system in the world by using standards set by Washington bureaucrats.”

Initial reaction to the plan in Congress tended to fall along party lines, with Rep. John Kline, the chair of the House Committee on Education and the Workforce, warning that “imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage — and even lead to federal price controls”: while Sen. tom Harkin, chair of the Senate Committee on Health Education Labor and Pensions, issued a statement applauding the presdient’s proposals.